Independent Financial Advisor's Enable have been helping many families where the child's income is insufficient to allow them to purchase a first home. Another way to support your children is by using your own income to boost what can be borrowed. This can be done by acting as a "guarantor" or opting to take out a joint mortgage.
One of the providers of mortgages Woolwich, currently allows the parent to be named jointly on the mortgage, but this doesn't mean the parent has to be a joint owner of the property. This helps sidestep any potential capital gains tax issues. The option is available on all Woolwich's core mortgage rates. The Mortgage Works offers specific deals for guarantors, some on a "limited liability" basis – where the parent guarantees just the top-up amount required above what the child could borrow.
Lenders however typically refuse to lend to parents who will be over 70 or 75 at the end of the mortgage term. You may be able to borrow over a shorter term, but this will push up the cost. Parents need to understand that they are offering additional security, which will be at risk if their offspring defaults on the mortgage. If you are over 70 and have a lot of equity in your home, you could consider releasing some but, lenders have tightened their policies since the downturn, which can affect what parents can borrow." Enable’s IFA’s will be able to help you find the right deal to help your family.'
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